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India is Rupert Murdoch's safe haven for now

Media experts say that Murdoch's India business is completely insulated from what is happening in the UK and the US, events that have pushed the group into crisis in Western markets.

Anusha Subramanian | July 27, 2011 | Updated 14:00 IST

Rupert Murdoch, the 81-year-old chairman of News Corporation, has been in the news for a while now but this time around for all the wrong reasons. He is currently accused of nepotism and a phone-hacking scandal for which he is undergoing a parliamentary trial in the UK.
 
Media experts say that Murdoch's India business is completely insulated from what is happening in the UK and the US, events that have pushed the group into crisis in Western markets. Many Indians may not even know that the Star TV channels in India are owned by Murdoch.

Murdoch's conglomerate, which owns assets worth $66 billion (about Rs 3 lakh crore) across the world, has a significant presence in India, including in the television content and distribution, publishing, films and news businesses.
 
Murdoch first came to realise the importance of India and China after the global financial meltdown of 2008.  In early 2009, Murdoch wrote to the whole company saying that it was rare to face an environment so fraught with difficulty yet so full of opportunity. He reminded his staff then that the group should renew its focus on large opportunities and prepare for change. His key indication then was to focus on emerging markets such as India. It was in this context that he sought to build truly special businesses in Star India, Star Greater China and Fox International Channels.
 
After the restructuring, Star India is the important hub for News Corp in India and Uday Shankar, CEO of Star India, now reports directly to Rupert's son James Murdoch, Chairman and CEO for Europe and Asia, News Corporation. In March this year, when Murdoch Jr was in India, he rued regulatory bottlenecks in the country but promised to continue to invest in India as a priority market. Even in the last annual report for the year 2010, Murdoch Sr has said that India is being developed as a 'next generation' business by the group. (Read: An interview with James Murdoch)

Robust advertising revenue growth from the Indian TV business has consistently found a mention in News Corp's annual and quarterly results for last few years.
 
Star India is a significant business for News Corp currently, earning revenues close to Rs 2,500 crore, according to a media consultant with Global Four.  Of this amount, two-thirds would come from advertising generated by Star's television business and one-third from its distribution business. Among its television business, flagship Hindi general entertainment channel Star Plus is the cash cow. The channel is consistent for the last three weeks with over 300 GRPs. Star Plus has garnered 320 GRPs this week.

But with pressure mounting in the US for a full-scale inquiry into News Corporation under the Foreign Corrupt Practices Act, it's possible that News Crop's subsidiaries across the world will also come under review. If this happens, Murdoch will really have cause to worry.

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